Event Horizon: Call for creative uses of delegation to boost participation

Grants Discussions
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The Problem

After attending several Arbitrum Working Group and Open Governance calls for the past several weeks we wanted to flag a concern that has come up various times. Despite the size and activity level of the Arbitrum ecosystem, the DAO itself has a small number of active participants. As of Feb 9, the last 10 Arbitrum Snapshot proposals saw an average 27,598 wallets participate. This is in light of the 921,457 ARB holders (895,477 on L2, 25,980 on L1). This results in an average participation rate <3%. Retail is not voting.

This strikes us as a problem. Granted, this is a problem insofar as we accept the following:

Axiom: A democratic system is more robust the more opinions are heard.

We can motivate this assumption by recognizing that while 99% of new ideas might fail, a crucial competitive edge is likely to come from that 1%. Over 97% of ARB holders are currently sidelined, likely due to the unfortunately rational conclusion that their small retail holdings won’t move the needle in a governance vote and aren’t worth the hassle. But it’s also likely true that that 1% of winning ideas is currently sitting idle in the head of a member of that long tail distribution of retail ARB holders.

tl;dr: Our suggestion is that we brainstorm more ways to increase the variance of idea generation in the Arbitrum DAO, to increase voter participation. Let a 1000 blossoms bloom.

Constraining the solution space

Whenever the topic of grants comes up, it’s important to remain grounded.

@SeriousPeople underscored this in their Forum post on KPIs. They argued (with broad community support) that we ought to pay closer attention to how Arbitrum Grants benefit the ecosystem. Some formulae were thrown around before @danielo wisely pointed out, with the support of others including @DisruptionJoe, the danger of being wed to measurables.

The space of possible beneficial projects to the ecosystem is significantly larger than the space of measurable beneficial projects. Not everything can be reduced to a KPI, and KPIs are often gameable. In short, “not everything that can be counted counts, and not everything that counts can be counted.”

Does this mean we throw caution to the wind? Of course not. Thankfully, when considering boosting retail participation, there is a no-cost way of doing so: delegation, not grants.

Without having to emit any ARB tokens, the DAO can reward active retail participants with governance authority. One advantage to this approach is that it attracts governance-interested folks, not capital-chasing mercenaries as can be the case with outright grants.

Delegation is already a common solution for getting knowledgeable parties to vote with meaningful authority in the ecosystem. But we view delegates as just one part of the three major stakeholders (the other two being team/investors and retail). Of these three pillars, all are well represented except retail, so to that end we want to open up a conversation about how we can leverage delegation in novel ways to bring more retail to the table.

We took a stab at some initial ideas, but would love to brainstorm up some more ideas worth pursuing. Some initial ideas include:

  • Retroactive delegation en masse: finding the most active, but smallest voters on the DAO and rewarding them with more authority. To make a dent on participation rates we would have to agree to some hurdle rates (number of votes taken, earliest vote, etc). Uniswap recently did something similar, albeit on a much smaller scale than we envision

  • Delegating to a publicly accessible governance pool: delegating to a sub-DAO where retail can freely or easily join to vote with an increase voice than they otherwise would be able to (disclaimer: this is a solution we’re actively working on)

Conclusion

It’s in Arbitrum’s best interest to bring more retail voices to the table. The best way to do that is by increasing the scope of delegation to active participants. Some preliminary ideas include retroactive delegation en masse, and delegation to a sub-DAO. Delegation, not grants, provide an easy, no-cost solution to the problem of low voter turnout. But this is just our initial thoughts. We’re looking forward to hearing from the rest of the community about other interesting ways to leverage delegation as a means of bringing more retail voices to the table thereby empowering hitherto now neglected 3rd pillar of DAO governance.

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This is a key problem because not having engaged citizenry means a smaller talent pool to mobilize. Less expertise. Less checks and balances. Less value creation.

We need to make governance fun.

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Sub-DAOs are one area I’d like to explore more.
I was playing around https://www.party.app/ and the concept of a small group of people gathering around a mission, an objective, having internal processes, then dissolving when things are done, can be very powerful.

I imagine someone very passionate about topics like sustainability or UX (so topics beyond self-recursive DAO sectors) wanting to gather around value-aligned peers to discuss some solutions, initiatives, come out with a proposal, get the budget approved and then present the results to the main DAO.
This is partially happening with the working groups but we could further explore how to empower these entities for the long run.

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Love the idea of sub-DAOs as an area of greater focus. Would love to have a call where we brainstorm various applications of retail voter pools, sub-DAOs, techniques for retroactive delegations, and other ideas that the community wants to unpack.

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Thanks for shedding light on this issue! Boosting retail engagement in governance is crucial for ensuring a diverse range of perspectives are heard. The proposal to leverage delegation, particularly through retroactive delegation and sub-DAOs, presents interesting possibilities. It would be nice to have retail involvement in DAO governance. Looking forward to contributing to this important initiative!

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I love the idea Event Horizon proposes, of increasing the influence of small fish in Arbitrum. I can see delegation to a pool that votes based on how small votes are cast really taking off in the DAO. I would note though that large delegates already consider how small voters are voting before casting their own, so in some senses it is implictly baked in as soft power. Event Horizon proposes converting this influence of small voters into hard power, which i think is a great step.

At the same time, i dont really see the need for a proposal to get started on this. I would recommend Event Horizon self-delegate whatever ARB it can, even if it is only 1000 or so. Then show the proof of concept that this 1000 ARB is programmatically voting based on the wishes of smaller voters, and approach large holders (and eventually the DAO) to delegate to this pool.

As i was chatting with @DisruptionJoe yesterday, I am actually opposed to giving participants voting rights without the token itself as it leads to disalignment.

With only increased governance, participants will earn income by being a power broken which is maybe not what we want. With increased governance and a token, participants earn income by making good decisions and increasing the value of ARB, which is what we definitely want.

I really welcome this conversation. Currently there is “Arbitrum Royalty” or delegates with greater than 7-8 million ARB who call the shots on whether proposals pass. As a first step, i’d love to see Event Horizon enter the gilded ranks of royalty via automated redistribution of their power to the smaller voters, whose voice we need to amplify.

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I would recommend Event Horizon self-delegate whatever ARB it can, even if it is only 1000 or so. Then show the proof of concept that this 1000 ARB is programmatically voting based on the wishes of smaller voters, and approach large holders (and eventually the DAO) to delegate to this pool.

We’re already doing this! You can go to EventHorizon.vote, mint your free voter pass, and mobilize the ARB that’s been delegated to the Event Horizon community today. We’ve been active on Arbitrum and several other DAOs for several months now.

I am actually opposed to giving participants voting rights without the token itself as it leads to disalignment.

We highlight this consideration in our latest forum post. But our docs go into more detail about how our token will be backed by the underlying DAOs, thereby aligning incentives. So this is something we’ve placed a lot of thought into, great observation!

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Do we know how voting participation has changed over time since the creation of the DAO?

Also, 3% may not seem high but I guarantee there are a lot less unique users overall.

This might have been touched on but do we know if delegations count as voting?

One thing someone mentioned is encouraging re-delegation as well, which might showcase even less activity overall as many people delegate and forget.